Property Matters

Panama Properties 103 (Pty) Ltd v Land and Agricultural Development Bank of South Africa

  • This case dealt with the validity of a loan entered into between the two parties whereby, as security for the loan, a mortgage bond was provided, the terms of which were notably broad. The bank subsequently claimed that the loan was invalid for its failure to comply with the Land and Agricultural Development Bank Act 15 of 2002 alongside the Public Finance Management Act 1 of 1999. The bank however sought to claim the mortgage bond to recuperate the money lent to the appellant.
  • Therefore the main consideration before the court was whether, if the loan was invalid, the mortgage bond could still be enforced as security. The court a quo, the High Court, had held the loan agreement to be invalid and that the mortgage bond could, on the basis of an enrichment claim, be claimed.
  • On appeal to the Supreme Court of Appeal, the court held that the agreement had not complied with the provisions of the said Acts and thus was invalid. The court further noted that the broad language of the mortgage bond covered a range of debts owed to the respondent and thus could be utilised to recover the amount owed to the respondent.

Ruiners v Minister of Human Settlements and Anorther

  • The case at hand dealt with the validity of a decision to refuse the applicant an exemption of registration as a builder under the Housing Consumers Protection Measures Act 95 of 1998, in terms of Section 10A.
  • The court held in instances of section 10A applications, the council has a duty to investigate the application to determine whether the applicant met the criteria for exemption, i.e that they are a bona fide ‘owner builder’, and that when the applicant has fulfilled these requirements, the duties that rest on a home builder and the consequences of breach, therefore cease to exist from the time the builder applied for exemption.
  • The court therefore ordered that the decision of the Minister was to be set aside and that the matter be referred back to the council to investigate whether the applicant qualified for the exemption.

Four Arrows Investments 68 (Pty) Ltd v Abigail Construction CC and Another

  • This case dealt with whether a contract entered into between the parties, constituted an option to purchase a portion of land or whether it was a sale subject to a suspensive condition. According to the Subdivision of Agricultural Land Act 70 of 1970, particularly section 3(e)(i), the selling or advertising of agricultural land is prohibited without the consent of the Minister of Agriculture.
  • The court held that in the circumstances, the true nature of the contract was that of a sale of the agricultural land and the fact that it did not comply with the Act, invalidated such a contract.
  • However the court, in obiter, held that regardless of if it were an option, the outcome of the case would have been identical. The court reasoned this on the basis that the wording of the Act encompassed not only sales of land but also those steps preceding the sale as it expressly stipulated ‘adverts’ and thus it would not be unreasonable to infer that it was the legislature’s intention to preclude option contracts too.

Ellis and Another v Cilliers NO and Others

  • This case dealt with a contract of sale of a property whereby latent defects were thereafter discovered. The contract of sale entered into between the parties contained a ‘voetstoets’ clause which stipulated that the house was sold ‘as is’ and that the seller was not responsible for any defects therein.
  • The Court went onto hold that in order to circumvent such ‘voetstoets’ clause, it must be proven that the seller firstly knew of the defect and secondly that he or she did not disclose such a defect in order to intentionally defraud. In this instance, the defendant knew of the latent defects, namely the levelling work which had to be done on the house.
  • Therefore the enquiry became whether such a defect, of which the defendant had knowledge of, hinders the ordinary use of the property. The court held that such defects would not be expected to be discovered by the reasonable person and as such did hinder the ordinary use of the property. The next enquiry was whether the defendant should have informed the plaintiff of this defect.
  • The court held in this regard, relying on Odendaal v Ferraris, that where a seller does not disclose the truth as they are not bothered to consider the significance of it, such may constitute fraud. The court therefore held that such a defect should have been disclosed and thus the ‘voetstoots’ clause was circumvented and the defendant was held liable.

Mathale v Linda and Another

  • This case dealt with the appeal of an execution order against an eviction order granted by a Magistrate’s Court, which eviction order was subsequently appealed by the applicant.
  • On appeal to the High Court against the execution order, the High Court held it would not be in the interests of justice to appeal such an execution order. Such reasoning was similarly followed by the Supreme Court of Appeal.
  • The Constitutional Court however, held that the court a quo had erred in their approach, in their belief that the orders did not require a court to engage in the interests of justice analysis. The Court further held that if the order was final, as it would have been, the appellant would have suffered irreparable harm. The order was thus set aside.


Absa Ltd v Moore and Another

  • The case at hand dealt with the validity of contracts, in which people were mislead by the effects of the contract, as well as the validity of mortgage bonds obtained by ‘owners’ of property who were a party to the scam.
  • The court a quo held such contracts were simulated, thus disguising their true nature, and were thus invalid. Furthermore the court held that a mortgage bond registered in favour of the bank would in these instances, fall aside. The court however held that Moore was to register a bond in favour of Absa to repay the money it had acquired from Brusson.
  • The Supreme Court of Appeal however found the contracts were not simulated as not all parties had attempted to disguise the nature of the contract in question but that rather the contracts were induced by fraudulent misrepresentations. The court thus upheld the order of the court a quo, however it held that the order to register a bond between the applicant and respondent was to be set aside as the court did not have the power to make a contract between the two parties.

Disclaimer: All information contained herein does not constitute legal advice in any form or manner nor is it intended. All legal advice must be obtained or gained from a consultation with a qualified lawyer. The views and opinions expressed are those of the cited authors and not those of the publishers of iGazette. iGazette accepts no liability for any information which may be incorrect.

© Rui Lopes. All Rights Reserved.

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